Kenyan retail B2B and end-to-end distribution platform Marketforce laid off some of its workforce in July, sources familiar with the matter said.
According to an email from Markford CEO Tesh Mbabu and obtained by TechCrush, the layoffs are part of a restructuring strategy in Kenya, which includes five markets including Nigeria, Rwanda, Uganda and Tanzania.
Mbabu confirmed the news in a call with TechCrush and stated that the company has laid off 54 people. Marketforce had more than 600 employees before last month’s incident, so about 9% of its total workforce was affected, primarily in the field sales, supply chain and customer experience departments.
Some roles have been instrumental in Marketforce’s growth over the years, with the company putting thousands of merchants to shame. Retail business platform. However, they are now out of favor as the company wants to generate more revenue at the dealership, the CEO said. “We were at a point where we were focused on growth, but we are now at a point where we are improving to profitability,” he added.
This February, Marketforce raised $40 million in Series A debt and equity (shared equally across the board) from V8 Capital Partners, Ten13 VC, SOSV Select Fund, VU Venture Partners, Vastly Valuable Ventures and Uncovered Fund. Mbaabu founded the company in Masongo Sibuti As a SaaS platform for retail distribution in 2018. Two years later, the company launched RejaReja, an on-premise merchant super app and marketplace where informal merchants can source goods directly from manufacturers and distributors, fulfill orders digitally and receive payments for utility bills.
Since its launch, Rejareja has grown exponentially, with more than 87,000 orders placed through the platform at an average basket value of $151. With 40% month-on-month growth, it is expected to record annual transaction volumes of more than $60 million by the end of last year, the company told TechCrunch this February. Some of its competitors Include players like Wasoko, TradeDepot and Omnibiz.
Last year, the four-year-old company said it would introduce buy-now to help traders access fast-moving consumer goods (FMCG) on credit. Marketforce also highlighted the expansion into additional markets in East and West Africa; However, those plans may be on hold for the time being following this structural change in Kenya.
The sources also suggested that Marketforce may be struggling with business as suppliers begin to pull out. Brushing aside the claims, Mbaabu said, “As part of optimizing sustainability, we are driving load-based operations and reducing SKUs, which means fewer suppliers overall.
Mbaabu, in an email, assured the employees that the company still has enough weapons in its treasury and that the company’s decision is to “adapt to the global economic instability” and “optimize the business to different growth parameters”. Some roles will be redundant in the Kenyan market, and new ones will emerge. Not all of our markets will be affected, he said. According to the CEO, Marktama Force has started hiring in Tanzania to increase production of Rejareja; Before now, businesses in the country only had access to the SaaS platform.
For employees affected by the reorganization, Marketforce says:
- It offers counseling to help you navigate change and manage stress during uncertain times.
- Offer training sessions on improving your CV, your LinkedIn profile and interview preparation techniques.
- Partner with employers who are considering opportunities at other organizations looking to hire.
- Submit service certificate and recommendation letter as applicable.
- Pay in lieu of notice plus 15 days severance package for each completed year of service and unused vacation days.
“To be clear, it’s a path to profitability discussion. “I think for a lot of people, even internally, it was hard to understand why we raised money and had cash but still got laid off,” the CEO said, commenting on how employees reacted to the news. But any extra month spent with out-of-work employees is a short runway. And, at the end of the day, I think you have to think about how you handle layoffs in a humane way. But make sure the company’s interests are sincere.
The job cuts from Africa’s tech scene are small compared to the rest of the world. Last week, news of Kenyan logistics platform Sendi laying off staff made the rounds, adding to previous reports from Swivel, Vezetta and Wave. This, and the funding data shows that the African ecosystem is already close to $3 billion. The first half of this yearThe continent’s performance over the previous year has forced many observers to express hope that the region’s chances of emerging from this bear will not be harmed.
But as Africa’s tech scene emerges as one of the most prominent tech markets in the world, a crowded, rapidly changing landscape could begin to emerge, especially in the second half of this year as more startups raise bridge rounds and cut staff sizes and accept smaller valuations. “The moment of truth will be the end of summer,” said Max Cuvelier, co-founder The biggest dealhe told TechCrunch in an interview in June. “August [and] “Especially September because that’s when we saw the biggest growth last year,” he said.